Last Thursday, Ginny Weatherstone (VMC Executive Director) graciously gave a few folks a tour of the Minvilla structure. Besides myself and Ginny, other attendees included architect Dan Schuh, City employee Robert Finley, Ten Year Plan leader Jon Lawler, nearby resident David Nix and Dept. of Community Services employee Mike Dunthorn. A few key points and/or observations that came from this meeting:

a. Complete project funding is not in place.
b. A final construction contract is not in place.
c. The structures have sat unsecured and continued to deteriorate since VMC took possession.
d. Approximate site/construction project cost will be ~$200/ft2.
e. The estimated cost of the project has nearly doubled in just 18 months.
f. Jon and Mike asserted that Knoxville is not out of the norm in having such concentration of homeless services.
g. Mike agreed to quickly supply me, via e-mail, with a list of cities, similarly sized to Knoxville, that have the aforementioned concentration.
h. Ginny expressed that because of her emotional ties to the project, it would be hard to abandon at any cost.
i. Jon agreed that if an alternative location at a much lower cost could be acquired, the project could be relocated allowing Minvilla to be sold to private developers.
j. Approximate construction time will be ~1 year.
k. New construction would be much cheaper.

It is quite disturbing to think that since acquisition, VMC has allowed further deterioration of this building but more importantly, our community should ask two important questions:

1. Does it make sense to spend ~$200-300 per square foot on apartments that are designed to be a "housing first" initiative for those just coming off the streets?

---and---

2. As we know, many of these folks have substance abuse issues so does it make sense to house those just coming off the street so close to those who are still on the streets risking a setback?

In short, wouldn't it be better to choose a more cost-effective option in order to help more people with housing first and wouldn't it make more sense to house these folks nearer better role models and service jobs to integrate them back into functioning society?

Additionally, at least two developers with whom I have spoken have expressed and interest in private development of Minvilla. Given this current situation, it is simply reprehensible for this project to continue unquestioned.

A recent civil grand jury report found panhandling, public drunkenness, and street loitering plague downtown San Francisco, despite successful efforts to house the homeless, the San Francisco Chronicle reported (SFGate.com). The newspaper reported that up to 75% of area street people live in city-funded housing. "We just warehouse addicts," grand jury member Stuart Smith told the Chronicle.

"We understand very clearly that we need to take a close look at what is happening," the city's homeless coordinator Dariush Kayhan told the newspaper. He said he expects the city to have pilot programs aimed at curtailing misbehavior on the streets ready by year's end.

I wish Knoxville's homeless coordinator, Jon Lawler, would undertake similar measures. I also have heard inside information that VMC really doesn't have a plan for providing assistance for these maybe-someday Minvilla-housed homeless, that they "really need to sit down and have some brainstorming sessions."

You think?

Nah, let's give 'em $200-300 per square foot housing and still let them defecate on the sidewalk, like they're doing in San Francisco.

If developers are still interested despite the neighborhood that seems like the way to go. There are an awful lot of vacant lots in this town and it would be nice to move some of these services away from Broadway.

I want to correct some misinformation with this comment. This won’t answer every conceivable question you might have, but hopefully can help bring you a little closer to understanding why this project costs what it does and what is its purpose.

So let me bring you up to speed on a few aspects of Minvilla.

Cost: well below $200/sf.

Minvilla is an expensive project because it’s historic rehab. When early estimates hit the papers and the pixelverse, they were very low. The former developer made the best estimate that he could with the information he had at the time. We now have much better information (completed construction documents, for one thing) and a firm estimate. It is much higher than the preliminary one to which people indexed their expectations, but it is also realistic. Based on revised cost estimates and post-rehab square footage, the cost is well below $200 per square foot.

Corporate investors will supply approximately 75% of this project's funding. The investors who purchase the equity generated by historic tax credits and low-income housing tax credits, the bank issuing the mortgage, the Federal Home Loan Bank, all of those are ultimate sources of funding for this project and others like it. These investors see this project as a good investment in our community, and their dollars could come to Knoxville from anywhere.

Another 25% of the funding for Minvilla will be public funds set aside by the Federal Government for the purpose of making housing available to those who otherwise couldn't afford it. Other dollars are set aside by the Feds to be disbursed by local entities like the City and County, both of which are committed to ending chronic homelessness.

Developer interest

Nobody involved with this project is seriously entertaining notions of developing some other permanent supportive housing project in lieu of Minvilla or of selling the property to a private developer. Any professional developer who considers purchasing this property is probably going to be aware that prior to its transfer to Volunteer Ministry Center, at least two different developers tried to make a go of something there and couldn't make the numbers work. That was in a much stronger real estate market with much lower construction costs than today's. If Minvilla were such an attractive property to developers, VMC would not own it right now.

Too, Minvilla has access to low-income housing equity to the tune of about $2 million. That's around a third of this project's financing. That money goes away if you do a market rate project there.

Expansion of what?

Minvilla does expand the footprint of VMC in 5th & Broadway. That is a technical fact. But Minvilla's not a business-as-usual expansion of homeless services in the mission district. And that is the truth.

Minvilla is permanent supportive housing, which is the proven, effective approach that we will use to end chronic homelessness in Knoxville. Minvilla's not going to be a shelter or transitional housing or a feeding program or a street ministry or a sidewalk-strangling swarm of panhandlers. Instead, it's going to be an apartment complex that will house rent-paying residents.

All of Minvilla's residents will have some things in common: relationship with a case manager, some form of income, accountability, healthier relationships. The most significant of those things they'll have in common? They won't be homeless anymore. They’ll be like this guy: (link...)

Gary Waddell is the kind of resident who'll be at Minvilla. He's one reason that it's fair and true to say that Minvilla does not represent an expansion of service to homeless people. Minvilla is about ending homelessness.

Mr. Finley states there is misinformation; however he doesn't state to what misinformation he is referring. He states that ~$2mm is 1/3 of the cost making the project only ~$6mm which at ~30000 sq feet is ... well, uh---$200 per square foot.

The simple questions are:

1. Could not more people be served at a lower cost elsewhere?
2. Does it make since to have these fragile individuals located in an area with so much drug abuse, alcohol abuse, etc.?

Your cost figures are not based on accurate information. Also, in my experience you have misrepresented, in a nuanced way, much of the conversation we had with you at Minvilla. You did this not by making statements that were totally inaccurate, but rather by leaving out a lot of context. I'll give you one example.

You said this: "Ginny expressed that because of her emotional ties to the project, it would be hard to abandon at any cost."

Ginny actually spoke for a few moments about this. She delivered a beautiful expression of compassion, and passion, about ending homelessness and her vision for doing it right there, in the heart of where the issue is blackest. You boiled that down to purely emotional issue.

So. That's the kind of thing I'm talking about.

1. Could not more people be served at a lower cost elsewhere?
Obviously, new construction is always going to cost less than historic rehab. The City transferred ownership of Minvilla to VMC because it had been sitting forlorn and decrepit for so long. VMC will preserve it. And yes, we need more affordable housing units for permanent supportive housing here. Most of them will be cheaper to develop than this one.

2. Does it make since (sic) to have these fragile individuals located in an area with so much drug abuse, alcohol abuse, etc.?
VMC's Jackson Apartments used to be located in the same kind of neighborhood. Of course, now that block of Gay Street is gentrifying and is not the crazy place it used to be. But before that gentrification took place, that was a pretty tough place. VMC had then, and continues to have, great success with using Jackson Apartments as permanent supportive housing. The environment surrounding it was similar to the one around Minvilla. My money's on VMC. If they could do it where they are now, they can do it at Minvilla.

Do I live in Knoxville?
LOL. Depends on your perspective. That's what's on all my mail...

About once a quarter, we see stories like the one about Mr. Waddell in local media that are more directed toward fundraising for the ministries than they are telling the true picture of homelessness in Knoxville.

How about posting online the statistics for the Jackson "apartments" instead? Let's look at outcomes, turnover rates, recidivism, job placements, income and expenses of residents, please. Just how self-sufficent is this program helping these people become?

Does VMC yet do any outcomes-based reporting?

I'd also like an explanation for why the City continues to allow KARM to dump the homeless on the street in between meals, with no real meaningful programs in between. There's your problem.

I'd also like a total on government expenditures (city and county, since your office is jointly funded) of block grant money that has been used to concentrate homeless services on Broadway. That would include the CDBG money used to purchase the Rescue Mission building which Ginny said she had to have, but promptly tore down, as well as the money used to acquire Minvilla. How much, Robert?

Readers, keep in mind that the CDBG money used to purchase the Rescue Mission ended up in KARM's hands after the transaction was complete. That's over half a million to a ministry, passed through another ministry, for a lot that was worth about $125,000. That is a gross misuse of federal taxpayer funds.

Hi Robert,
My cost figures were supported your post as referenced as well as our conversation ~9 days ago. You are correct that Ginny Weatherstone is very passionate about the project and I don't begrudge this whatsoever; however, we can all become blinded by passion.

As you have stated, this goal of housing first could be accomplished much less expensively elsewhere. So now that this question has been answered, we must ask ourselves if it is in anyone's best interest for fragile individuals to be housed so close to an enabling zone.

You have proven my point very well.

Thank you,
Bill Pittman

By the way Robert...do you live within the city limits or not. This seems a fair question particularly by a tax paying Knoxvillian. Thank you.

"My cost figures were supported your post as referenced as well as our conversation ~9 days ago."
No, Bill. Actually, we told you at the time that there were answers that we still needed to some important questions related to post-rehab square footage of the building. Your figures of $200-$300 per sf are not now and have never been supported by hard data.

And Bill, I have not "proven [your] point." Everyone knows that new construction is cheaper than historic rehab. You're suggesting that just because there are cheaper ways to build housing we should abandon this project, and you're making an unqualified judgment on the likelihood of the success of a permanent supportive housing project in the Broadway & Fifth corridor. VMC has had success in a similar environment. I think they'll have success at Minvilla. So does VMC, or they wouldn't have taken the project on; if it's a failure, they're left holding the bag, after all. If your "point" were correct, nobody would be doing permanent supportive housing anywhere like this area, and that is not the case.

And, as I told you when we met the first and, so far, only time, I live in Farragut. That's why I thought your earlier question was rhetorical.

While you can parse Bill's words over when you disclosed not living in Knoxville, my questions are not rhetorical. You chose to engage in this forum. I would appreciate answers to my previous questions.

And I'm not trying to be evasive, but most of the questions you've asked go beyond my purview. I'll respond to them singly.

"How about posting online the statistics for the Jackson "apartments" instead? Let's look at outcomes, turnover rates, recidivism, job placements, income and expenses of residents, please."
This is not information to which I'm privy, and I don't represent VMC in a general sense. I have engaged the issue of Minvilla specifically because our office is deeply invested in its completion and its success as a cornerstone permanent supportive housing project of the Ten-Year Plan. VMC staff have told me that their Jackson Apartments are working very well for their residents, and I trust them completely, so I use Jackson as an example. These questions are best directed to VMC.

"Just how self-sufficient is this program helping these people become?"
I'm going to address this because it's a question related directly to the Ten-Year Plan. The short answer is "As self-sufficient as they're capable of becoming." To flesh that out, people who are chronically homeless are disabled. In practice, this means that they are mentally ill and/or seriously impaired by substance abuse. Many of them (and I can't give you a precise figure) are the kinds of people who would have been institutionalized up until the sixties, when mental illness became a civil rights issue. We don't institutionalize most mentally ill people anymore, and many of them extremely dysfunctional, homeless, and not getting any better. Our strategy is first to help them obtain permanent housing in a safe, secure environment with support so that they can work on the issues that led to their homelessness in the first place. Ultimately, we want to see all of them become more self-sufficient, and beyond that, to become reintegrated with the community outside of which they existed when they lived on the streets.

"Does VMC yet do any outcomes-based reporting?"
Please see above.

"I'd also like an explanation for why the City continues to allow KARM to dump the homeless on the street in between meals, with no real meaningful programs in between. There's your problem."
That's a good question. It pertains to homelessness in general, and our focus is on chronic homelessness. Nonetheless, the answer is that KARM is scheduled to shift some resources around in their present facility so that they can open a day shelter there this fall. It seems reasonable to project that that will reduce the burden on that stretch of sidewalk and the surrounding neighborhoods. However, the City cannot force people to stay inside at KARM, they cannot force KARM to accept clients, and KARM has no power to force people to stay inside once they come inside. KPD also can't arrest people for just being out on the sidewalk; arrestees have to be observed to be doing something illegal. My understanding is that the City has not had strong sidewalk ordinances since those kinds of ordinances were abused during the civil rights movement in the sixties. It's a big mess, and it's going to be a complicated one to fix. As the Ten-Year Plan is implemented, the overall burden imposed by people who are chronically homeless will shrink, and that will help in many ways with the broader issue of homelessness in general.

"I'd also like a total on government expenditures (city and county, since your office is jointly funded) of block grant money that has been used to concentrate homeless services on Broadway. That would include the CDBG money used to purchase the Rescue Mission building which Ginny said she had to have, but promptly tore down, as well as the money used to acquire Minvilla. How much, Robert?"
This is a very fair question, and my full answer to it would necessarily be a long one. But I'm afraid that for me to answer this would be to make an official statement on City business outside the scope of the Ten-Year Plan, and that it would probably be inappropriate. I'd be stepping on someone's toes, and I don't know whose.

Robert,
It was my understanding that one of the purposes of the Ten Year Plan was to bring together disparate agencies and resources. As you are empowered to represent the Office of the Ten Year Plan, rocket squirrel's questions certainly would seem like something that you should or could answer. The ongoing lack of information provided by the homeless service industry creates confusion, consternation and suspicion.

It is my hope that all who are involved in the over-concentration of Knoxville's homeless services would welcome dialog rather than shun it or disclaim knowledge and/or responsibility. This would go along way toward building consensus and community respect.

I represent this office, but not the whole City of Knoxville. I also don't function as a communications person for the various agencies who serve people who are homeless. I think that would be a fascinating job, not least because of the fact that it would be so challenging to do it equitably, but it's one that's not assigned to me. For me to start doing it would be highly inappropriate.

This is just my .02: I agree with you that rightly-understood transparency and accountability are good things. I also think that making this whole massive stew of issues transparent, so that accountability can be in effect, is a challenge because the recipe is so complex.

I appreciate your comment about new construction but the simple fact remains that many more people could be served by other, currently available properties and common sense dictates that separating a person who is overcoming substance abuse issues from current drug and alcohol abusers is logical. As to the ~$200/ft issue, you stated that ~$2mm was a third of the cost of the ~$6mm+, 30,000 foot project. However, setting this algebra aside, the 57 apartments (all efficiency and/or 1BR) are going to cost ~$125k/each which is simply astronomical.

Finally, I don't recall your city of residence being discussed when we met but Farragut is a very nice town and a great place to live. It's just a shame that more people who work for our city choose not to live in our city.

"...the simple fact remains that many more people could be served by other, currently available properties..."
We'll do everything we can to make this happen, Bill, because we've got a lot more than just Minvilla's fifty-seven to get off the streets. We've always got our eyes open for available properties, both existing housing and buildable land.

"...common sense dictates that separating a person who is overcoming substance abuse issues from current drug and alcohol abusers is logical."
It seems logical to me too. And I think that's what happens, in effect, when someone moves off the streets and into permanent supportive housing with its built-in support and accountability, and in this case proximity to key resources like the case management and other programs across the street at VMC, and the employment program resources down the block at The Salvation Army. Besides, you've already got a decent number of folks in transitional housing programs at SA, and they're staying clean and sober right in the midst of the same scene. I know it's tough, and it may defy logic, but many of them are succeeding.

"However, setting this algebra aside, the 57 apartments (all efficiency and/or 1BR) are going to cost ~$125k/each which is simply astronomical."
Bill, this particular editorial point is one that you keep making over and over. It's a lot of money to me, too. It would be to almost anyone. But people who are professional developers of this kind of housing (affordable housing/historic rehab) tell us that it's a quite reasonable per-unit figure for a project like this.

"...Farragut is a very nice town and a great place to live. It's just a shame that more people who work for our city choose not to live in our city."
I've lived here for five years, and it has been a good thing for us. Since you want to talk about personal choices here, I'll tell you why I made this one. We used to live in a very cool 1948 crazy cape cod-like house on Woodcrest Drive over by the Inskip area. We invested a lot in the house, planted some sweet fruit and nut trees, had great, eccentric neighbors with some of whom we were good friends, lived <10 minutes from downtown, to which we made many treks. We also had little kids. We wanted them to spend a lot of time with their grandparents, who live in Farragut. The forty-minute drive three or four times a week was killing us, and that was long before gasoline became so expensive. One of the main reasons we moved out here was to reduce one of our most important and constant commutes. The move made it almost ten times shorter.

I don't feel like that's a shame, Bill. It was a difficult choice, and I wonder about your motives in bringing it up here. I sometimes drive by our old house. This spring, the almond trees I planted actually had almonds on them, which really wasn't supposed to happen. The apple trees I planted look demented. The house looks great though.

But I digress. Our move to this house predates my City employment by four years. Don't get me wrong. I like where we live. I also miss where we used to.

I still need help with the math. Is it not really $6 million, or is it not really 30,000 sq ft, or is 6 million divided by 30 thousand no longer 200? Or is the proclamation that the figure is below $200/ft holy writ not subject to worldly analysis?

Hayduke,
Here is the precise quote on the cost from the June 20th KNS:

"It's kind of a moving target … but the total project is a little north of $6 million," said David Arning, who is the Ten-Year Plan's housing coordinator at Southeastern Housing Foundation, a nonprofit development agency that's been brought in to oversee the project.

I was told after repeated requests that the project size is ~30,000 feet and this would be in line with what architects familiar with Minvilla have told me so, the math is pretty simple. What is not simple is what the true cost will be once the project has been completed. It seems to be rising at a rate of $500k per 6 months and as Mr. Arning further stated:

"Fuel costs and the faltering economy have driven up construction costs"

So it seems very logical that the project will inch its way to $300 per square foot but even if it stays at just ~$200/square foot, why would the Office of the Ten Year Plan not seek other, more economical options which could move more fragile folks from the street...that is the unanswered question.

Hello Robert,
Thank you for your reply but unfortunately, it doesn't answer the simplest of questions.

You state that:
"But people who are professional developers of this kind of housing (affordable housing/historic rehab) tell us that it's a quite reasonable per-unit figure for a project like this."

Robert...this begs the obvious (at least to most people) question...if renovating Minvilla is so expensive, then why not abandon it and seek the other readily available alternatives which I have pointed out to you? What is the fixation with Minvilla in the face of astronomical costs?

As to separating folks from the temptations which lead to the homelessness, I'm glad that some people have been successful at Salvation Army but it would probably be more successful if they were decentralized. Since we have a uber-concentration of homeless services, we don't know how much more successful these programs could be.

Also...thank for your thoughtful comment on your move to west Knox County; I don't begrudge anyone's choice of neighborhood but it strikes me as a little more than telling that everyone whom I have met associated with the Ten Year Plan live in west Knoxville.

The unanswered questions are plain and simple:

1. If Minvilla is so expensive and growing more so at a rate of ~$1mm/year, why not choose something other than an expensive "historic structure"? Why squander the money that could be used to move more people into housing first options on a quicker basis?

2. While it is good to hear that some folks have succeeded in lifting themselves from homelessness, how many more people could have succeeded if they hadn't been over-concentrated? Please cite for me any and all studies that show that housing fragile individuals near on-going substance abusers produces better results than the opposite.

North Central Village is about finished and I'm coming up with 7,829 sq ft for $1,169,000 or $149.32/ft. Not enough space to do the job, but decentralizing would be nice anyway. Could probably split up the larger condos to get more units without getting close to the Minvilla cost.

Hayduke...I haven't checked your #'s but I think you're looking at the sales price for mid-range condos. I've e-mailed the folks at the Ten Year Plan office so much more affordable options...some of which could be had below $39/sq ft and that would provide the logical decentralization that is needed; for example:

Yep. I just pasted the sales prices and sq ft of the units into a quick spreadsheet and added everything up. Didn't mean that as a serious suggestion; Just showing that even brand new construction meant for more discriminating buyers could be had for less without any of the upside risk (construction costs always increase). Your suggestion of buying a bunch of existing structures makes 3-4 times as much sense.

In order for a person to enter housing at Minvilla, he or she must have established a relationship with a case manager (CM). Most CMs are social workers; each will typically manage 25 clients. When the client's needs are more intense, that client might be assigned to a CM who has a lower CM/client ratio. The CM/client relationship is ongoing: it stays intact as long as the client needs it and desires to maintain it, even if the client moves into housing elsewhere.

CMs do a lot of different things, among them making sure that clients get to appointments with healthcare and mental healthcare providers, that they stay on their medications, that if they've got an appointment for a job interview, they show up for it. The CM also stays apprised of the client's living situation, visiting clients in their apartments to make sure that things are going the way that they're supposed to.

You're right. Good case management is the key to success of any permanent supportive housing. Housing without it is just housing, and we know that doesn't work for people who are chronically homeless. It sets them up to fail.

Some people at Isabella and other KCDC properties, and at other sites throughout the community do have case managers who are doing what I describe above. Right now, it is in those kinds of scattered sites that Knoxville's homeless services providers house people who were chronically homeless. That will continue. We'll always help these folks find housing in already-existing units.

As I recall, Weatherstone justified receiving the big grant because the building was "uniquely suited" to her organization's needs.
Then she tore it down.
Now she's building a fortress-like structure that's even more uniquely suitable, I guess.

Whatever -- its probably the most expensive Broadway lot in modern history, courtesy of the taxpayers.

A construction cost of 200 dollars a square foot as low figure is simply ridiculous. This is Knoxville, not San Francisco. Why should we create a "Flagship" housing center for the homeless? There are developer created market rate condos that are selling for less than this.

I own a rental property that meets HUD Housing Quality Standards and is rented through KCDC, the total cost of this property is under 40 dollars a square foot. There are many other private individuals that can provide quality housing at far lower cost than this project. There are also plenty of slumlords, so a rigorous screening process such as the HUD HQS can ensure compliance.

Why should the tax payers invest North of 200 dollars a square foot? Unless we want to create a pocket of homelessness that will keep people from walking North of Downtown.

Why did the city demolish the College Homes Project in Mechanicsville in favor of mixed income housing? Why are there plans to demolish the Walter P. Taylor Homes? Because clusters of poverty do not work. Only mixed income integrated housing solutions are successful.

Put in the hands of the RIGHT private develepor Minvilla could be the next Kendrick Place. Decentralization of homeless services would also create the added benefit of blighted homes in mixed income neighborhoods to become productive rental properties.

here is the effect of locating all these homeless services on broadway just north of i-40:

* the return on millions of dollars in downtown investment is capped, because a key corridor for growth is cut off.

* adjacent commercial properties remain underutilized and therefore undervalued, because not many companies--and very few if any truly desirable ones (from a tax-generating standpoint)--will want to locate in the mission district.

* what could be incredibly valuable real estate is concentrated in the hands of non-profits, keeping it off the tax rolls.

* the cost to the city--and the private sector--to acquire the property and turn it over to the non-profits is significantly higher than other properties.

* the cost of developing the property is significantly higher than new construction or other properties. who pays for this? taxpayers and the private sector.

* the value of property in adjacent neighborhoods remains depressed, costing homeowners and the city millions

and most importantly...

* the goal of eliminating chronic homelessness goes unmet, because we concentrate services to such an overwhelming degree that we actually create an enabling community, not a supportive one.

This isn't just a question of $200/sf apartments for the previously chronically homeless, though that is surely a major issue. This is about many, many millions of dollars in extravagant hard costs and lost opportunity, and its about quality of life for all of Knoxville.

Tragically Hip....well-stated! And a great overview of the bigger picture.

The still unanswered question is: why is the Office of the Ten Year Plan not recommending other options which would:

a. Move people into a "housing first" option sooner
b. Allow more people to be positively affected (b/c of lower cost options)
c. Promote decentralization which would relocate these fragile individuals away from an enabling zone